Divorce is an arduous process that can bring out the worst in people. During a divorce, people who loved each other once can sometimes act as if they are bitter enemies, trying to hurt the other person at every turn. As a result, it is important for people going through divorce to make the process be as amicable as possible.
Even with stats showing that about half of all marriages eventually come to an end, most couples walking down the aisle in Texas have visions of a lifetime together. Still, there are times when some life partners begin to explore the possibility of permanently separating. While there are certainly valid reasons for ending a marriage, there are also some equally valid financial reasons why couples may want to give divorce a second thought.
When a Texas couple decides to end their marriage, they will have to split their retirement accounts as part of the divorce settlement. The splitting spouses should give careful attention to the details involved in the division and distribution of retirement accounts such as 401(k) plans, pensions and IRAs. Mistakes could result in unexpected tax bills or an ex-spouse receiving an unintended amount of money.
Saying goodbye to an ex in Texas doesn't mean credit card debt automatically disappears. In fact, credit card companies typically have a legal right to make efforts to collect debt owed by both spouses following a divorce. This is why it's widely recommended that newly divorced individuals make an effort to leave a marriage free of debt obligations. Plus, having lingering marital debt opens an ex up to the possibility of attempts by creditors to obtain what's owed should a former spouse file for bankruptcy or fail to make scheduled payments.
Texas couples who are going through a divorce may be able to avoid financial errors if they are aware of some of the most common ones. For example, some people may be tempted to spend a lot of money just after the divorce, but they may regret this when the bills are due.
The simple mention of a prenuptial agreement to a soon-to-be-married individual or his or her family is likely to bring a charged reaction. For many in Texas, it seems inappropriate, at the very least, to initiate a discussion regarding the potential for the failure of a marriage before it has had the opportunity to begin. At worst, it signals the inevitable doom of the union. However, understanding exactly what a prenup is and isn't can provide some perspective.
The Tax Cuts and Jobs Act, or TCJA, may mean lower federal tax rates and a higher limit for the Alternative Minimum Tax for some individuals in Texas, but it could also make divorce more expensive for soon-to-be-exes. This is especially true if children are involved since the TCJA eliminates the value associated with personal and dependent exemptions. Alimony payments will also be considered a simple property transfer without tax consequences for either party.
An increasing number of older couples in Texas and across the country are choosing to divorce. While the divorce rate remains twice as high among younger couples, it has doubled since 1990 for people age 50 and older. At the same time, the rate has remained steady or even slightly declined for younger couples. People at any age can divorce successfully and move on to a happy single life, but it can be particularly important for people who divorce later in life to take care of their health.
There are a number of factors that could affect whether or not a Texas couple is likely to divorce, and one of the most significant could be when one partner feels a sense of hopelessness. When people in happy relationships come home after a hard day, they can take solace and support from their partners. One couples therapist said that she looks at the level of hopelessness in a relationship to determine whether a couple is more likely to split. When people are hopeless, they feel that nothing more can be done to keep the relationship together.
Going through a divorce can cast a long financial shadow, and a study released by the Center for Retirement Research reveals that the net worth of divorced households in Texas and around the country is about 30 percent lower than married households. The Boston College-based group also says that divorced spouses are 7 percent more likely to struggle financially during their retirement years. The study, which was published in June 2018, used figures from the Federal Reserve's latest Survey of Consumer Data.